Today’s refi rates moves lower

Mortgage refi rates were mixed today, but the popular 30-year fixed refinance rate fell, according to data compiled by Bankrate.

  • 30-year fixed refinance rate: 4.18%, –0.03 vs. a week ago
  • 15-year fixed refinance rate: 3.48%, +0.04 vs. a week ago
  • 10-year fixed refinance rate: 3.40%, +0.01 vs. a week ago

Here’s a pro tip: Getting multiple offers can save you thousands of dollars over the life of your mortgage. “The extra effort of comparison shopping among lenders and putting in an extra application or two can pay dividends for years with a lower rate and savings on fees,” says Greg McBride, CFA, Bankrate chief financial analyst.

30-year fixed refinance

The average 30-year fixed-refinance rate is 4.18 percent, down 3 basis points compared with a week ago. A month ago, the average rate on a 30-year fixed refinance was lower, at 3.87 percent.

At the current average rate, you’ll pay $482.04 per month in principal and interest for every $100,000 you borrow. That’s lower by $6.98 than it would have been last week.

You can use Bankrate’s mortgage calculator to estimate your monthly payments and find out how much you’ll save by adding extra payments. It will also help you calculate how much interest you’ll pay over the life of the loan.

15-year fixed refinance

The average rate for a 15-year fixed refi is 3.48 percent, up 4 basis points over the last seven days.

Monthly payments on a 15-year fixed refinance at that rate will cost around $448 per $100,000 borrowed. Yes, that payment is much bigger than it would be on a 30-year mortgage, but it comes with some big advantages: You’ll save thousands of dollars over the life of the loan in total interest paid and build equity much faster.

10-year fixed refinance

The average rate for a 10-year fixed-refinance loan is 3.40 percent, up 1 basis point from a week ago.

Monthly payments on a 10-year fixed-rate refi at 3.40 percent would cost $441.27 per month for every $100,000 you borrow. As you can see, the big savings in interest costs you’ll reap with that short 10-year term comes with the downside of a much larger monthly payment.

Where are refinance rates headed?

Since the beginning of the coronavirus pandemic in 2020, rates have been hovering around historic lows. But now rates are on the rise as the Federal Reserve moves to contain inflation. Most experts predict rates will jump through 2022.

“Mortgage rates continue to surge, as they have since the beginning of the year, as the outlook takes shape for Fed rate hikes that are sooner and faster than previously expected,” McBride says. “Mortgage rates are still well below 4 percent but in an environment of already sky-high home prices, more would-be homebuyers are priced out with each move higher in mortgage rates.”

To see where Bankrate’s panel of experts expect rates to go from here, check out our Rate Trend Index.

Want to see where rates are right now? See local mortgage rates.

Last updated March 4, 2022.

What is a mortgage refinance?

Refinancing your mortgage means taking out a new home loan. In the process, you’ll fully pay off your existing loan, and then start payments on a new one. The two most popular kinds of mortgage refinances are rate-and-term changes — which result in a new interest rate and a reset payment clock — and cash-out refinances. The latter allow homeowners to take advantage of their home equity by taking out a new mortgage with a larger principal based on the home’s current value.

30-year refi? 15-year refi? Cash-out refi? What is right for me?

No matter what kind of refinance you decide to undertake, once you close on your new loan, the payment clock goes back to zero. For example, if you take out a new 30-year mortgage, you’ll have another 30 years of payments in front of you.

That said, a 30-year refinance is the right choice for a lot of people. Extending the term of your loan means lower monthly payments, which can ease the squeeze if you find yourself with a tight budget.

A 15-year refinance has some advantages, too, namely that you pay a lot less interest over the life of the loan. Because 15-year loans tend to have lower interest rates than their 30-year counterparts and a shorter repayment window, the overall savings can be significant. Keep in mind, though, that a short repayment window is a double-edged sword. It does help you save in the long term, but with less time to pay, 15-year mortgages have higher monthly payments.

Here are sample payments on a $300,000 mortgage at 3 percent interest:

Term Monthly payment Total cost
30-year $1,265 $455,332
15-year $2,072 $372,914

A new mortgage can also help you tap your home equity if you exercise a cash-out option. If you have enough equity in your home, you can apply for a new mortgage with a larger principal balance and take the difference from what you owe on your old loan in cash. Doing so can allow you to finance other spending at a low rate compared with other forms of borrowing. Some of the most common uses for cash-out funds are home improvements, debt consolidation or education financing.

What does a mortgage refinance cost?

Refinance costs can change based on where you’re located, the lender you’re working with and a range of other factors. The general rule of thumb, however, is that costs are around 2 to 5 percent of the loan’s principal amount. On a $300,000 mortgage, that equals $6,000 to $15,000 in closing costs.

Can you save money with a refinance? Is now a good time to refi?

Yes, depending on your situation. Especially with mortgage rates hovering at all-time lows, it’s a great time to refinance. If you have a loan that you’ve been holding since before 2020, you’re almost guaranteed to be able to refinance to a lower-rate mortgage. That can mean significant savings each month and over the life of the loan, so it’s worth looking into.

Remember, though, you’ll want to calculate your break-even timeline. If you’re planning to move soon, you may not save enough to recoup your closing costs before you do.

How to shop for a mortgage

Shopping around is crucial to get the best deal on your mortgage. Make sure to get quotes from at least three lenders, and pay attention not just to the interest rate but also to the fees they charge and other terms. Sometimes it’s a better deal to choose a slightly higher interest loan if the other aspects are favorable.

How to get the best mortgage rate

  • Shop around
  • Do your research to understand the mortgage market in your area
  • Consider working with a mortgage broker
  • Don’t try to time the market — rates change nearly constantly, and you could lose out on a good deal if you wait

Minimum credit scores for different kinds of mortgages

Different mortgages have different minimum requirements for their borrowers. Although lenders are free to adjust these numbers as they please, here are the most common credit score minimums for some common types of mortgages:

If your credit score is less than 500, work on improving it before applying for a mortgage, because most lenders won’t issue a loan to someone with a score of 499 or lower. On the other hand, if your credit score is higher than these minimums, you may be able to secure a better interest rate.

Methodology: The rates you see above are Bankrate.com Site Averages. These calculations are run after the close of the previous business day and include rates and/or yields we have collected that day for a specific banking product. Bankrate.com site averages tend to be volatile — they help consumers see the movement of rates day to day. The institutions included in the “Bankrate.com Site Average” tables will be different from one day to the next, depending on which institutions’ rates we gather on a particular day for presentation on the site.

To learn more about the different rate averages Bankrate publishes, see “Understanding Bankrate’s Rate Averages.”

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